What Led to Today’s Sensex Drop? Experts Weigh In
1) Manish Jain, Director – Institutional Business (Equity & FI) Division at Mirae Asset Capital Markets
– I will attribute the correction to continuous FPI selling, rising dollar, rising crude, start of result season on a cautious note. The government’s capex spending remains elusive, while depreciation of the Rupee has intensified, and a revival in consumption is still not evident. We will remain watchful for visibility in economic improvement on these fronts. The market is waiting for strong positive triggers which are still missing; hence volatility is expected to persist due to the earnings season, the upcoming budget, and potential shifts in trade policies with Trump’s return to the White House.
2) Manish Chowdhury, Head of Research, StoxBox
– Our sense is that markets have been under pressure today primarily due to weak business updates by companies, especially banks and some FMCG stocks. This has raised concerns about the third-quarter earnings performance which is scheduled to start this week. Though market sentiment may have turned a little sour due to initial HPMV cases found in India, its impact may be limited as the fatality seems to be lower compared to the COVID virus. Also, the news of HPMV virus was known to markets since last week. We believe that upcoming corporate earnings, rising crude oil prices, and strengthening Dollar Index will be key monitorable for markets in the near term. Also, market participants seem to be wary of taking aggressive bets ahead of the Trump administration resuming office on 20 January due to uncertainty surrounding policy measures.